History of the economic crises, part ІІІ

Economic Crises
Economic Crises

The oil crisis

After many years of poverty, the monetary reform in 1948 marked the beginning of the progress of the German economy. In the 1950s and 1960s, the dream of trips, car and a private home became reality for millions of Germans. However, in 1973, at the beginning of the fourth war in the Middle East, the Arabian states entirely or partially closed the oil tap to Israel. It followed another crisis.

On the Western Front

The petrol is the most important factor in production and a source of energy in the industrialized countries. They find themselves in a very uncomfortable position. The effect in Germany was a prohibition of the car traffic. The energy prices rose, although the economy was in stagnation. In the Western world, the oil crisis turned into the worst economic crisis since the 1930s.

Empty highways

Due to the oil crisis in 25 November 1973, Germany was the first to introduce a ban for Sunday driving on the highways. The prohibition was repeated two more times – on 2 and 9 December in the same year.

The Asian crisis

The Land of the Rising Sun was also affected by the economic crisis. After the end of the World War II, like Germany, Japan experienced an economic boom due mainly to the technical innovations. In the late 1980s, the country was faced with a huge bubble of speculation.

Everything starts from …

… Japan. Within just three years the Japanese Nikkei index had doubled, and the real estate prices became incredibly high. At low interest, Japanese borrow credits based on their overpriced houses. Moreover, the uncovered loans were shrouded by “magic” accounting. When the bubble burst at the beginning of the 1990, the country fell into a irresistible recession.

Like tsunami

The so-called tiger countries – Hong Kong, Indonesia, Malaysia, Philippines, Singapore, South Korea, Taiwan and Thailand, also felt the impact of the Japanese crisis. Along with the soaring house prices and shares, there was also a speculation bubble that burst in 1997. During the so-called Asian crisis, the rates collapsed and millions of people lost their jobs.

The „ .com” crisis

In the mid-1990s, there were about 18 million Internet users around the world. The rapid growth of this phenomenon was conductive to the development of a new international market. Since many companies became witnesses of a large-growth business for short periods, until the end of 1998, almost every company hired young business experts who were willing to work in a  „ .com” company.

The „ .com” bubble

Only three years after, the Internet market was already crowded. The expectations for higher profits by many companies remained unfulfilled. In March 2000, the U.S. stock market freezed, due to the sixfold increased interest on the part of the state. The bubble burst. Investors lost huge amounts, many businesses went bankrupt. By the end of 2000 the new market shares lost more than 90% of their value.

The latest crisis

Today we are facing with the greatest global crisis ever since 80 years. It began from major financial centers like New York and London. In the USA for example, years after years, banks lent to borrowers with dubious solvency. As a guarantee for the credit, served outstanding properties, mainly houses.

Shock in the whole world

The bubble burst, the amount of damage was immense. The trust between banks was shaken, and lending became a victim of the shock. The U.S. financial crisis turned into a global economic crisis. The search for causes and culprits still continues. But until the dream of quick and easy money earning leads to unlimited frivolity, the risk of new crises will remain.

 

 

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